Month: March 2019

A few weeks ago, I suggested property values in Edgware would be between 0.3% and 1.1% different by the end of the year. It might surprise some people that Brexit hasn’t had the effect on the Edgware property market that most feared at the start of 2018.

The basis of this point of view can clearly be seen in
the number of property transactions (i.e. the
number of property sold) that have taken place locally since 2008. The most
recent property recession was the Credit Crunch years of 2008/2009/2010.

In property recessions, the headline most people look
at is the average value of property. Yet, as most people that sell also go on
to buy, for most home movers, if your property has gone down in value, the one
you want to buy has also gone down in value so you are no better or worse off.
If you are moving up market – which most people do when they move home – in a
repressed market, the gap between what yours is worth and what you will buy
gets lower … meaning you will be better off.

Yet, most property commentators, including myself, suggest (and I have mentioned this before in some of my other blog articles) a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying). So, I decided to look at the 2018 statistics, and compare them with the Credit Crunch years (2008 to 2010) and the boom years (2014 to 2017). The results can be seen in the table below.

Then, I looked at the average quarterly figures for
those chosen date ranges … and created this graph …

In that 2008 to 2010 property Credit Crunch recession,
the average number of properties sold in the Edgware and Barnet area were 299
per month. Interesting when we compare that to the boom years of 2014 to 2017,
when an average of 402 properties changed hands monthly … yet in the ‘supposed’
doom laden year of 2018, an impressive average of 276 properties changed hands
monthly … meaning 2018 compared to the boom years of 2014 to 2017 saw a drop of
31.4% – and still only 7.6% lower than the Credit Crunch years of 2008 to 2010.

The simple fact is, the fundamental problems of the Edgware
property market are that there haven’t been enough new homes being built since
the 1980’s (and I don’t say that lightly with all the new homes sites dotted
around the locality). Also, the cost of buying your first home remaining
relatively high compared to wages and to add insult to injury, all those issues
are armor-plated by the tougher mortgage rules which were introduced in 2014
and the current mortgage market conditions.

It is these issues which will ultimately determine and
form the rather unexciting, yet still vital, long term outlook for the Edgware
(and national) housing market, as I feel the Brexit issue over the last few
years has been the ‘current passing diversion’ for us to worry about. Assuming
something can be sorted with Brexit, in the long term property values in Edgware
will be constrained by earnings increases with long term house price rises of
no more than 2.5% to 4% a year.

Fundamentally, the question I am asked by many Edgware buy to let landlords
and Edgware homebuyers is … “should I wait to buy or not?”

As a Edgware homebuyer, one shouldn’t be thinking of
what is happening in Westminster, Brussels, Irish Backstop, China or Trump and
more of your own personal circumstances. Do you want to move to get your child
in ‘that’ school or do you need an extra bedroom for your third child? For lots
of people, the response is a resounding yes – and in fact, I feel many people
have held back, so once we know what is finally happening with Brexit and the
future of it, there could a be a release of that pent-up demand to move home as
people humbly just want to get on with their lives.

There is little to be lost in postponing a house purchase
until there is better clarity on the situation. If it isn’t Brexit it will
something else – so just get on with your lives and start living. We got
through the global financial crisis/Credit Crunch in ‘08/’09, Black Wednesday
in ’92 where mortgage interest rates went from 8.5% to 15% in one day, we got
through the worst stock market crash with Black Monday in ’87, hyperinflation,
power shortages, petrol quadrupling in price in less than a year and a 3 day
week in the ‘70’s … need I go on?

Edgware Landlords? Well, where else are you going to invest your money? Like I said earlier in the article, we aren’t building enough homes to keep up with demand … so as demand outstrips supply, house values will continue to grow. Putting the money in the building society will only get you 1% to 2% if you are lucky. In the short term though, there could be some bargains to be had from shortsighted panicking sellers and in the long term … well, the same reasons I gave to homeowners also apply to you.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Over the last 5 years, we have seen some interesting subtle changes to the Edgware property market as buying patterns of landlords have changed ever so slightly.

The background to this story was the recently published set
of buy-to-let (BTL) lending statistics. Roll the clock back 12 months and 6,700
BTL mortgages were granted (in the same month) for £900m, meaning the average
BTL mortgage was £134,200. Looking at last month’s figures, and as one might
expect with the Brexit issue overhanging the property market, the lending
figures were down, yet not by the amount I originally thought. Last month, just
over 6,100 new buy-to-let mortgages were granted for a total sum of £800m
(meaning the average landlord mortgage was a respectable £131,100). Yet, when I
looked back to the boom year of the 2014 property market, in the corresponding
same month, only £1,030 million was borrowed on 8,300 buy-to-let properties
(meaning the average buy-to-let mortgage was £124,100). It seems Brexit is
having no effect on landlords buying habits.

Looking closer to home in Edgware, throughout 2018, I have
been regularly chatting to more and more landlords, be they seasoned
professional Edgware BTL landlords or FTL’s (first time landlords) and their
attitude is mostly positive. Instead of reading the scare-papers (oops sorry newspapers),
those Edgware landlords that look with their eyes, will see the Edgware
property market is doing reasonably well, with medium term rents and property
values rising; as quite obviously from the mortgage figures .. landlords are
still buying.

The question I get asked all the time is .. “What type of buy-to-let
property should I buy? You can make
money from property through both the rent (expressed as a yield when compared
to the value of the property) and how the actual value of the home itself
changes.

Since 2014, property values in Edgware have risen by 27.8%.

We have records of what each type of property (i.e. Detached/Semi/Terraced/Apartments) has achieved per square metre going back 20 years … and looking back over the last 5 years, these are the numbers ..

They all look to have similar percentage uplifts, however as you can see from the table there is in fact some variation throughout and although only slight this can equate to thousands of pounds in monetary terms.

This has proved that semis and terraced houses have
performed the best .. although like the £/Sq.M figures, these are just
averages. When investing, whilst Edgware apartments haven’t been the best
performers in terms of capital growth, they do tend to generate a slightly better
yield than houses, probably because several sharers can afford to pay more than
a single family. But houses tend to appreciate in value more rapidly and may
well be easier to sell, simply because there are fewer being built.

Now these are of course averages, but it gives you a good
place to start from. The bigger picture here though is this – irrespective of
what is happening in the world, be it Brexit/no Brexit, China, Trump, whatever,
Edgware people still need a roof over their heads and we as a Country haven’t
built enough homes to keep up with the demand since the late 1980’s. This means
even if we have a short term wobble in 2019 when it comes to property values
..in the medium term, demand will always outstrip supply and prices and rents
will increase – because, I doubt the local authority, let alone Westminster,
have the billions of pounds required to build the one hundred thousand Council
houses per year nationally for the next decade to fix this issue – meaning as
the population increases, the only people who can fulfil the demand for
accommodation in the medium term is the private BTL landlord.

Before I go …on average, housing associations and local authorities have built around 26,500 houses each year since 2010. The Labour government had a lower average, building about 19,000 homes per year, yet in the 1960’s, under both administrations, 180,000 councils were built per year!

If you are thinking of selling your Edgware home or If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

About the blog

This blog follows the property market in Edgware and the surrounding area, giving insight, analysis and comment on all property related matters and the local property market.
If you are interested in buying, renting, investing in Edgware then this is the blog to follow to keep up to date with all the information you need.

The author

Steve Wayne is the Managing Director of Benjamin Stevens Estate Agents, working locally in property since he was 17
Since 2004 he has had his own firm with branches of Benjamin Stevens in Edgware & Bushey Heath.